Arizona Energy Incentives Overview
Arizona's energy incentive picture in 2026 spans three distinct programs: the federal HEAR rebates (administered by the Arizona Department of Energy), utility rebates from APS, SRP, TEP, and UNS, and federal and state solar tax credits that make Arizona one of the top solar states in the country.
Arizona's utility landscape is unique — the state has four regulated electric utilities serving distinct territories. Unlike most states, SRP (Salt River Project) is a public power district not regulated by the Arizona Corporation Commission, meaning it sets its own solar export rates. Phoenix metro residents need to check whether they're an APS or SRP customer, as the programs differ significantly.
✓ Arizona HEAR Program — How to Apply
Contact the Arizona Department of Energy at energy.az.gov for the registered contractor list and income documentation requirements. Both enhanced ($8,000, below 80% AMI) and standard ($4,000, 80–150% AMI) rebates are available. Rebate is paid to the contractor — deducted from your invoice at project completion.
Arizona Utility Map — Which Utility Serves You?
Your utility determines which rebate programs you can access. Check your electric bill if you're unsure — Phoenix metro has both APS and SRP service territories with different boundaries.
| Utility | Territory | Heat Pump Rebate | Solar |
|---|
APS (Arizona Public Service) 1.4M+ customers · 602-371-7171 | Phoenix metro, Prescott, Flagstaff, Yuma | Up to $500 | Net metering |
SRP (Salt River Project) 1.1M+ customers · 602-236-8888 | East Phoenix metro, East Valley (Mesa, Tempe, Scottsdale, Gilbert) | Up to $400 | E-27 export rate |
TEP (Tucson Electric Power) 440K+ customers · 520-623-7711 | Tucson metro, surrounding Pima County | Up to $400 | Net metering |
UNS Electric 100K+ customers · 928-758-3781 | Mohave and Yavapai counties (Bullhead City, Kingman) | Up to $300 | Net metering |
APS — Navopache Electric Coop Cooperative members customers · 928-368-5118 | White Mountains region (Show Low, Pinetop) | Varies | Varies |
4 Things Arizona Homeowners Should Know
Heat pumps = AC in Arizona
Arizona's climate means most homeowners already use heat pump systems — the same unit provides cooling in summer and heat in winter. Replacing an older AC with a qualifying heat pump (16+ SEER2) unlocks utility rebates and the 25C tax credit simultaneously.
SRP customers: no traditional net metering
SRP is not regulated by the Arizona Corporation Commission — it sets its own rates. SRP uses the "E-27" export rate for solar rather than retail net metering, which is lower than APS's rate. Factor this into solar ROI calculations if you're an SRP customer.
Arizona solar tax credit stacks with federal
Arizona offers a 25% state income tax credit on solar installation (up to $1,000) that stacks on top of the federal 30% credit. On a $15,000 solar system: federal credit $4,500 + state credit $1,000 = $5,500 total tax credits. This makes Arizona one of the best states for solar tax incentives.
Summer peak rates — efficiency pays fast
Arizona electricity rates spike significantly in summer. APS and SRP both use time-of-use pricing with peak rates from 3–8 PM. An efficient heat pump that cools the home more effectively before peak hours can cut summer bills significantly beyond the standard efficiency savings.
All 11 Arizona Programs (2026–2027)
Data sourced from Rewiring America API · Verified July 2026 · Confirm at energy.az.gov, aps.com, srpnet.com, and tep.com
| Program | Applies To | Benefit | Income |
|---|
AZ HEAR — Heat Pump Rebate (Enhanced) Arizona Dept. of Energy · Rebate View Official Program → | Heat pump (ducted or ductless) | Up to $8,000 | Below 80% AMI |
AZ HEAR — Heat Pump Rebate (Standard) Arizona Dept. of Energy · Rebate View Official Program → | Heat pump (ducted or ductless) | Up to $4,000 | 80–150% AMI |
AZ HEAR — Heat Pump Water Heater Arizona Dept. of Energy · Rebate | Heat pump water heater (HPWH) | Up to $1,750 | Below 150% AMI |
AZ HEAR — Insulation & Air Sealing Arizona Dept. of Energy · Rebate | Attic insulation, air sealing | Up to $1,600 | Below 150% AMI |
APS — Heat Pump / Efficient AC Rebate Arizona Public Service · Rebate View Official Program → | Heat pump, high-efficiency AC (16+ SEER2) | Up to $500 | APS electric customers |
SRP — Energy Efficiency Rebate Salt River Project · Rebate View Official Program → | Heat pump, AC, smart thermostat | Up to $400 | SRP electric customers |
TEP — HVAC Efficiency Rebate Tucson Electric Power · Rebate View Official Program → | Heat pump, high-SEER AC | Up to $400 | TEP electric customers (Tucson) |
UNS Electric — Heat Pump Rebate UNS Electric · Rebate View Official Program → | Heat pump (Mohave/Yavapai counties) | Up to $300 | UNS Electric customers |
Federal 25C — Heat Pump Tax Credit IRS (Form 5695) · Tax Credit View Official Program → | Heat pump (all types) | 30%, up to $2,000/yr | No income limit |
Federal 25D — Solar Tax Credit IRS (Form 5695) · Tax Credit | Solar + battery storage | 30% (no cap) | No income limit |
Arizona Residential Solar Tax Credit Arizona Dept. of Revenue · State Tax Credit View Official Program → | Residential solar installation | 25%, up to $1,000 | No income limit |
FAQ — Arizona Energy Incentives
Who qualifies for the Arizona HEAR heat pump rebate?
Arizona's HEAR Enhanced Rebates target households below 80% of Area Median Income, while Standard Rebates cover 80–150% AMI. Both homeowners and renters (with landlord permission) of single-family and qualifying multifamily homes may apply. Income is verified at application — federal assistance program participants (SNAP, AHCCCS/Medicaid) often qualify automatically.
Am I an APS or SRP customer in the Phoenix area?
Phoenix metro is split between APS and SRP service territories. In general, central Phoenix, Scottsdale, Paradise Valley, and parts of Glendale are APS customers. Mesa, Tempe, Gilbert, Chandler, and parts of Scottsdale are SRP customers. The easiest way to confirm: check the logo on your electric bill, or enter your address at aps.com or srpnet.com.
Does Arizona offer any rebates for insulation or air sealing?
Yes — the Arizona HEAR program covers insulation and air sealing up to $1,600 for income-qualified households (below 150% AMI). APS also offers insulation rebates for existing customers. Arizona's hot climate means attic insulation and air sealing deliver significant cooling savings — often more than in northern states where heating is the primary load.
Can I stack the Arizona solar tax credit with the federal credit?
Yes — Arizona's 25% Residential Solar Tax Credit (up to $1,000) applies to your Arizona state income tax return and stacks on top of the federal 30% credit. On a $15,000 solar system: 30% federal = $4,500, plus 25% AZ state = $1,000 (capped), for a total of $5,500 in tax credits. Also note: Arizona exempts solar systems from property tax, so your assessed home value won't increase after installation.
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More Energy Rebate Guides
This guide is for educational purposes only. Program details change frequently. Always verify with energy.az.gov, aps.com, srpnet.com, tep.com, and IRS.gov before starting a project. Data sourced from Rewiring America API, verified July 2026.